For him BCPthe economy would grow between 2.5% and 3% in 2022. However, there are risks that tilt the balance towards the lower number, because the external winds that, in general, drove the PBI Peruvian, today they blow against it, and because of the political factors inside the country.
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“External risks have increased. A small and open economy like Peru’s is highly dependent on external factors, such as the growth of our trading partners. This lower global growth and even more so the significant drop in the price of copper translates into lower local growth”said Prieto at the presentation of the report on the Macroeconomic Situation of the Economic Studies area of the BCP.
Thus, there are four factors associated with the international and local situation, which according to the BCP would lead to the GDP growing 1.6% in the second semester, two percentage points less than in the first semester. In addition, private investment would contract by 1.4%.
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According to BCPinflation would continue to erode the margins of companies and the pockets of individuals, because it would continue to accelerate or would remain outside the Central Reserve Bank’s target, explained by the risk of a lower supply of fertilizers, which until now does not count with an appropriate government policy to find an alternative.
“The rise in oil due to the war and in fertilizers is going to hit [acelerar] to inflation in coming quarters and years. This is going to affect the planted area and the productivity of the field, reflecting in a lower food production next year and higher prices”Prieto said.
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The second factor that would slow down the national economy is the increases in financing interest rates, both in local currency and in dollars, generated by the increases in monetary policy rates of the central banks, to anchor inflation expectations.
According to Prieto, this has made companies’ debt more expensive, reducing their margins, and given that the increases will also end up being transferred to long-term rates, project financing and mortgages will become more expensive.
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For the representative of BCPgiven that inflation continues to accelerate, monetary policy rates would continue to rise and for this reason the bank expects the monetary authority to raise its reference interest rate at the next monetary policy meeting this month by 50 basis points to 6%.
According to José Larrabure, vice president of the CFA Society Peru, countries in the world, like Peru, have entered a cycle of lower growth in their economies, due to the withdrawal of the monetary stimulus from central banks to combat the acceleration of inflation that It is due, in part, to the stimuli that were given during the pandemic to avoid breaking the payment chain.
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This situation generates a lower demand for our main export products, which were the growth engine of the economy in 2021.
“We no longer only have local problems such as high rates and political instability, but external headwinds”said the investment expert.
Precisely, another factor that tips the balance towards a slowdown in the economy, according to the BCPis the lower growth of our trading partners, as well as the lower momentum of the post-pandemic rebound.
Larrabure stated that there is a new risk that was not included in the base scenario of investors six months ago, which is a possible recession in the United States, which would also be reflected in a deterioration in the dynamism of the global and Peruvian economies.
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According to BCPanalysts project a recession [caída en la producción durante un periodo de tiempo] in the United States, associated with the FED’s interest rate hike of more than 3% and high energy prices.
“This [lo que le pase a EE.UU.] It is important, because how things go for our business partners will go the same for us”Prieto commented.
Finally, Prieto said that formal employment has grown 6% above its pre-crisis levels, but could fall in the last quarter at the same rate as private investment, if the Government does nothing about it.